Equity markets globally have been taking it on the chin on Monday, in the wake of Friday’s selloff. The market is clearly seeped in fear, though the jury’s a little mixed on whether the gnashing of terrible teeth and showing of claws will go on unfettered.

“Previous falls have seen a wave of liquidity move into the market to buy on any weakness, but the volume of concerns—in particular in relation to central bank support—is making it far more difficult for investors to simply brush off this latest downturn as an opportunity rather than a threat,” Interactive Investor’s Rebecca O’Keeffe told investors in a note.

The central bank perfect storm: Fed threatening a hike, no new stimulus announcement from ECB, BOJ frozen in uncertainty about next stimulus

Keith Parker, global equity strategist at Barclays, cautions that investors may not be ready for what comes next. “With U.S. equities futures positioning near the highs and short interest near the lows, investors don't seem to be positioned for a turn in the data cycle and a bottoming/turn in the rates cycle,” he said in a note Monday.

Parker says the risk isn’t due just to central banks, but also to politics. This weekend’s mental image of Hillary Clinton hacking away on her sick bed doesn’t help, and Wall Street’s biggest nightmare—a Trump presidency—is starting to get priced in, says iBank Coin’s The Fly.

We’re getting the last of the Federal Reserve speakers today, before the quiet period ahead of the central bank’s Sept. 20-21 meeting. All eyes and ears will be on the Fed’s resident dove, Lael Brainard, who will is tapped to speak later. O’Keeffe says fingers are crossed Brainard will “maintain her dovish stance and ease market fears for next week’s Federal Reserve meeting.”

But are investors just fearing the fear? That’s what our call of the day says. Scratch the surface, and this market isn’t in such bad shape and bargains are around the corner. Our chart backs up a shiny, happy theory that doesn’t go so unwanted on a Monday.

Key market gauges

S&P 500
US:ESU6
Dow industrials
US:YMU6
and Nasdaq-100
US:NQU6futures are in the red, but things are calming down a little. That comes after a rough session in Asia
ADOW, +0.36%
where stocks plunged and the Hang Seng Index
HSI, -0.44%
fell 3.3%, the biggest drop since February. In EuropeSXXP, +0.58%
French and German stocks are around 1.7% lower.

The call

Cracked Market’s Jani Ziedins has a theory on why markets sold off on Friday, and it’s not what lots of people are thinking.

His argument is based on game theory: “Traders are not selling the economic damage of a rate-hike (real), they are selling ahead of what they think will cause a selloff (imagined),” he writes.

In other words, if you think the crowd is getting spooked, you sell ahead of that anticipated fallout. But at the end of the day, there’s no real meat to this selloff.

“If no one is changing their personal outlook about the economy, then they will continue to have the same appetite for stocks. While they might cash in some chips ahead of the widely expected ‘rate-hike crash,’ they will jump back in once the waves settle down,” says Ziedins.

The upshot is, the market’s weakness will be short-lived, so be ready to jump in. Of course, knives could keep falling today (as they are in the early going), Ziedins says, so maybe wait a bit for things to settle.

The chart

MKM Partners

After the worst day for the S&P 500 since Brexit, whatever could be next for stocks? MKM Partners’s Jonathan Krinsky says for the short term, a break below initial support at 2,155 for the S&P 500 on the heaviest distribution day in a year (increased selling by big institutions) is a setback for the bulls.

And markets rarely bottom on a Friday, he adds, so that means the market could weaken toward 2,110.

Krinsky is overall positive, despite Friday’s fracas. He says “with 71% of the SPX still above its 200 DMA (daily moving average), high beta outperforming low volatility, and a 97% down volume day now behind us, we still think bulls win the game.”

The buzz

Tesla
TSLA, -0.45%
has made some big tweaks to its Autopilot feature, to help its electric cars “see” better. CEO Elon Musk said that upgrade “very likely” could have prevented a fatal crash in May.

The economy

Lael Brainard is the last Fed official to speak before the quiet period.

No data on tap for Monday, in a week that will serve up retail sales and consumer sentiment, among other economic readings.

There are several Fed speakers ahead: Atlanta Fed President Dennis Lockhart in prepared remarks released ahead of his speech say that economic conditions in the U.S. warrant “serious discussion” about resuming raising interest rates.

Minneapolis Fed President Neel Kashkari is speaking at 1 p.m., then the highlight—Fed Gov. Lael Brainard will be heard in a moderated Q&A at 1:15 p.m.

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